Expedia Inc. said its fourth quarter profits dipped 1.4 percent because air travel revenue decreased and hurt the online travel agent's top line. The company reported a profit of $70.3 million for the fourth quarter, down from $71.3 million a year earlier.

Expedia’s profits have gone up and down as its investments in technology and marketing sometimes offset higher revenue from hotel reservations. Revenue from air travel has slowed by comparison as higher ticket prices and other factors affect new bookings.

Room nights booked grew 19 percent, driven mostly by growth in the Americas and Asia Pacific. Gross bookings increased 10 percent, primarily driven by 19 percent growth in hotel room nights due to strong performances at Hotels.com brands, Expedia Affiliate Network, Hotwire and Egencia. Average daily room rates grew 2 percent for the quarter.

In contrast, average airfares for the fourth quarter were up 10 percent year-over-year which was almost entirely offset by an 8 percent decline in tickets sold. Domestic bookings increased 7 percent and international bookings increased 15 percent for the fourth quarter of 2011. International bookings totaled $2.5 billion for the fourth quarter of 2011, accounting for 39 percent of worldwide bookings compared to 38 percent in the prior year.

For the full year, gross bookings increased 12 percent, mostly driven by 18 percent growth in hotel room nights and 5 percent growth in hotel average daily rates. Average airfares for the year were up 11 percent versus 2010, which was offset by an 8 percent decline in tickets sold. Domestic bookings increased 6 percent and international bookings increased 23 percent for the year. International bookings totaled $11 billion for 2011, accounting for 39 percent of worldwide bookings compared to 36 percent in the prior year.

As a percentage of total worldwide revenue in the fourth quarter of 2011, hotels accounted for 73 percent, air accounted for 9 percent and all other revenue sources accounted for the remaining 18 percent. Worldwide air revenue decreased 19 percent for the fourth quarter due to an 11 percent decrease in revenue per ticket and an 8 percent decrease in air tickets sold. The decrease in ticket volume was partially due to a 10 percent increase in average air ticket prices.